[arin-ppml] ARIN-prop-165 Eliminate Needs-Based Justification

[jeffmehlenbacher at ipv4marketgroup.com]

Owen, you are correct to say "Current policy does not do that. It does
limit the size of the transfer to the justified need, but, it does not
reject the transfer."

Please understand however, that when ARIN rejects a specified transfer
of, for example, a /16 under current policy and concludes, for example,
that only a /20 is justified...there is little recourse for the Buyer or
Seller.  They have executed an Asset Purchase Agreement, funds were held
in escrow for the full /16 and the deal is dead.  The Seller will not
carve out the unused /16 holding to a /17, a /18 a /19 and two
/20s-necessitating modification to the current transaction plus 4 more
transactions and all of the additional sourcing of additional Buyers and
execution of legal agreements.  The Buyer must seek alternatives which
may include returning to ARIN for a free distribution of a /20.

Again, the Seller's /16 remains unused which serves only to add to the
scarcity of supply and the Buyer has consumed many months in planning
for the deployment of the now rejected /16.  What purpose has been
served?  

Jeff Mehlenbacher

-------- Original Message --------
Subject: Re: [arin-ppml] ARIN-prop-165 Eliminate Needs-Based
Justification
From: Jeffrey Lyon <jeffrey.lyon at blacklotus.net>
Date: Fri, February 17, 2012 2:43 pm
To: Owen DeLong <owen at delong.com>
Cc: "<jeffmehlenbacher at ipv4marketgroup.com>"
<jeffmehlenbacher at ipv4marketgroup.com>, arin-ppml at arin.net

On Fri, Feb 17, 2012 at 2:19 PM, Owen DeLong <owen at delong.com> wrote:
>
> On Feb 17, 2012, at 10:59 AM, Jeffrey Lyon wrote:
>
> On Fri, Feb 17, 2012 at 1:25 PM, Owen DeLong <owen at delong.com> wrote:
>
> Jeff,
>
>
> If this policy is adopted, it would enable speculative brokers who wanted to
>
> to maintain inventory without showing need for the addresses. It would
>
> potentially turn IP addresses into a commodities futures market which I do
>
> not believe would serve the community well.
>
>
> You say that no purpose is served when a transfer is rejected between a
>
> company with an unused allocation and a company in need.  Current policy
>
> does not do that. It does limit the size of the transfer to the justified
>
> need, but, it does not reject the transfer.
>
>
> However, no purpose is served when addresses are allowed to be purchased by
>
> organizations without need and great harm could come from allowing such
>
> transactions if they start occurring on large scale in order to engage in
>
> speculation or worse, anti-competitive practices.
>
>
> Owen
>
>
> Owen,
>
> As resident devils advocate, I would be remiss not to point out that
> anyone who stocks IP space they can't sell would soon find themselves
> out of business thus discouraging others from substantially engaging
> in the same practice, thus the "invisible hand" fixes the market.
>
>
> True, but, it would not be unusual to stock addresses at $10 until the
> market had high demand and low supply, then try to sell them for $50.
>
> The community does not benefit from that $40 spread. The community is harmed
> by that $40 spread. Only the speculator benefits from that spread.
>
> The invisible hand is slow to react and easily manipulated by those with
> resources to do so.
>
> Owen
>
>
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Having a test market would not have any impact on the supply and
demand of the free pool. The free pool would continue to exist as-is.
The only spread would be in the test market, so those not
participating are not impacted.

-- 
Jeffrey Lyon, Leadership Team
jeffrey.lyon at blacklotus.net | http://www.blacklotus.net
Black Lotus Communications - AS32421
First and Leading in DDoS Protection Solutions